Sol Melia SA is opening its first U.S. hotel this week in Atlanta, adding to an expanding field of competition for upscale travelers as demand recovers.
The lodging chain’s $35 million conversion of a former Marriott Renaissance into a Melia Atlanta will be followed over the next five years by entries into New York, Chicago, Miami and yet-to-be-determined cities in California and Texas, according to Andre Gerondeau, an executive vice president for the Palma de Mallorca, Spain-based company.
“It’s been a distressed market, but we see it coming back and we see opportunity,” he said in an interview at the Atlanta property. “It’s never the perfect time, but it’s a good time.”
Upper-tier hotels, catering to business travelers and high- income individuals, are attracting new entrants after rebounding from the recession faster than other segments. London-based Virgin Group Ltd. formed a partnership in September to spend as much as $500 million on high-end hotels over the next three years, initially targeting U.S. markets such as New York and San Francisco. Pebblebrook Hotel Trust, which went public as a real estate investment trust in December, has announced acquisitions of seven upscale hotels for $564 million since June 7, including two this week in Philadelphia and Los Angeles.
Pre-Recession Occupancy
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